As oil prices surge again, Canadian gas prices are also increasing, not solely due to the Iran conflict, as per an analyst. The average cost of a liter of gas in Canada stands at $1.674 on Tuesday, up 3.4 cents from last week’s average, reports GasBuddy.com. Patrick De Haan, GasBuddy’s head of petroleum analysis, projects further price hikes to about $1.70 on average by day end, with most Canadians likely experiencing a rise of five to 10 cents per liter in the upcoming days.
The spike in gas prices is mainly attributed to the U.S.-Iran conflict pushing oil prices higher. Tensions escalated following a breakdown in the Middle East’s ceasefire agreement, while Russia’s conflict with Ukraine has also impacted oil supply in recent weeks. Brent crude hit its highest price since June 12 at around $86 US per barrel early Tuesday before slightly dropping to just over $84 per barrel midday.
De Haan notes that it typically takes three to five days for gas prices to fully reflect such events. Given the unpredictable situation in Iran, De Haan anticipates that pump prices may continue to rise if the U.S. and Iran maintain hostilities. President Donald Trump’s actions, including reinstating a blockade on Iranian shipping and proposing a fee for guarding the critical Strait of Hormuz, have added to the market uncertainties.
Moreover, disruptions in Russia’s oil infrastructure are exacerbating the situation. Ukraine’s increased strikes on Russian oil facilities have significantly impacted Russia’s refining capacity, affecting the production of essential oil products. Consequently, the International Energy Agency has revised Russia’s oil production forecast downward, and Russia has banned diesel exports to preserve its domestic supply.
The impact of Russia’s oil crisis is particularly felt in Canada’s Atlantic provinces, where gas prices are affected by the competition for gasoline volume driven by Europe’s demand following the loss of Russian products. Gas prices in Newfoundland and Labrador, Prince Edward Island, and Nova Scotia are notably higher than British Columbia’s, which had previously faced high prices due to the Iran conflict earlier this year.
De Haan advises drivers to consider filling up their tanks sooner to save on costs, as gas prices continue to rise.